Merrill Lynch Analysts See Section 301 Increase, Section 232 Auto Tariffs as Unlikely
Bank of America Merrill Lynch research analysts take a "benign view" of the likelihood of new Section 232 tariffs on the auto sector and an increase to the Section 301 tariffs on goods from China, they said in a Feb. 15 report. Aditya Bhave and Ethan Harris, both global economists at the bank, said that while the Commerce Department seems likely to conclude that auto imports are a national security threat, "sustained auto tariffs" are not expected. "Reasons include delays in the release of the report, the extent of lobbying pressure against the tariffs, and the Trump administration’s hesitance to slap tariffs on consumer products, of which autos are among the most visible," the economists said.
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Similarly, the administration appears sensitive to going forward with new tariffs on China, Bhave and Harris said. "Delays in implementation suggest the administration is hesitant to follow through on its threats,
and one reason for this is that the direct impact on consumers from the next round of tariffs would be much larger than previous rounds," they said. "Moreover, the Trump administration has repeatedly made major threats on trade and then settled for minor concessions. Examples include the new NAFTA deal and the new free trade agreement with Korea."